NEW YORK STATE DEPARTMENT OF TAXATION AND FINANCE, Creditor, MARIANNE DE ROSA, Trustee.

Appeal from an order of the United States District Court for the Eastern District of New York, Thomas C. Platt, Judge, affirming dismissal by the Bankruptcy Court for the Eastern District of New York, Dorothy Eisenberg, Judge, of Chapter 13 petition on the ground that the debtor's noncontingent, liquidated, unsecured debts, including liability for employee withholding taxes unpaid by debtor's corporate employer, were above the statutory ceiling for a petition under Chapter 13. Affirmed.

JOSEPH J. HASPEL, New City, New York (Stein Riso Haspel & Jacobs, New City, New York, on the brief), for Plaintiff-Appellant.

STEVEN U. TEITELBAUM, Deputy Commissioner of Taxation & Finance, Kew Gardens, New York (Elizabeth Rosenblum, of counsel), filed a brief for Defendant-Appellee New York State.

KEARSE, Circuit Judge:

Plaintiff Salvatore J. Mazzeo appeals from an order of the United States District Court for the Eastern District of New York, Thomas C. Platt, Judge, affirming an order of the United States Bankruptcy Court for the Eastern District of New York, Dorothy Eisenberg, Judge, which dismissed his petition filed under Chapter 13 of the Bankruptcy Code ("Code"), 11 U.S.C. Section(s) 1301 et seq. (1994). The district court ruled that Mazzeo's noncontingent, liquidated, unsecured debts included sums Mazzeo owed defendant United States with respect to his own income taxes and sums that Mazzeo's corporate employer had not paid defendant State of New York ("State") for employee withholding taxes, for which Mazzeo may be held responsible, and that the amount of those debts exceeded the statutory limit set forth in 11 U.S.C. Section(s) 109(e) (1994) for eligibility to proceed under Chapter 13. On appeal, Mazzeo contends that his debts to the defendant governments for withholding taxes are contingent and unliquidated, and that his non-contingent liquidated debts do not exceed the limit set by Section(s) 109(e). Finding no merit in his contentions, we affirm.

I. BACKGROUND

Most of the pertinent facts are undisputed. During 1993 and 1994, Mazzeo was president of Westfield Financial Corporation ("Westfield" or the "company"); he was also, in the words of his attorney, a "significant" minority shareholder. During that period, Westfield filed quarterly returns with the Internal Revenue Service ("IRS") and the State's Department of Finance. On those returns, an employer is to report the amounts it has withheld from its employees' wages pursuant to its statutory obligations, see 26 U.S.C. Section(s) 3402 (requiring withholding for federal income tax); id. Section(s) 3102 (requiring withholding of tax imposed by Federal Insurance Contributions Act ("FICA")); N.Y. Tax Law Section(s) 671(a) (McKinney Supp. 1997) (requiring withholding for State income tax). The employer is also required to state the extent, if any, to which it has remitted the withheld funds to the relevant federal or state taxing authority. The forms state that the signer, to the best of his knowledge and belief, certifies that the information shown on the return is "true, correct and complete."

Quarterly returns filed by Westfield with the State for 1993 and part of 1994 showed that the company had withheld various amounts for State income tax. For the four quarters of 1993 and for the first and third quarters of 1994, the total withheld was $404,492.88. (The record is silent with respect to the other two quarters of 1994.) Each return showed that there were no payments or credits toward the indebtedness, and it is undisputed that these moneys were never paid. The returns were signed by Mazzeo, who thereby certified their correctness.

Westfield also filed quarterly tax returns with the IRS. Its federal return for the first quarter of 1994, signed by Mazzeo under oath, showed the total taxes the company owed the federal government for that period, of which $340,724.93 constituted amounts withheld from employees' wages for federal income tax and FICA. It is undisputed that the withheld amounts were never paid to the United States. If an employer does not pay withheld taxes as required, both federal and State law impose responsibility for payment on individuals who could have caused the employer to pay those taxes ("responsible-person" liability). The Internal Revenue Code imposes personal liability for such unremitted withholding taxes upon "[a]ny person required to collect, truthfully account for, and pay" the tax, who "willfully fails" to pay it. 26 U.S.C. Section(s) 6672(a). Under this section, the responsible individuals include all persons who are "connected closely enough with the business to prevent the [tax] default from occurring," Fiataruolo v. United States

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